Egypt’s annual urban consumer price inflation increased to 14.1 percent in May from 13 percent in April, official statistics agency CAPMAS said on Monday, a rise that analysts said was greater than expected and attributed to rising demand for food products.
Prices for food and non-alcoholic beverages rose 15.1 percent, up from 13 percent, CAPMAS said. Overall month-on-month inflation accelerated to 1.1 percent from 0.5 percent.
Egypt is approaching the end of an IMF-backed economic reform program during which inflation rose as high as 33 percent in 2017. Inflation later cooled, but rising food prices, especially fruit and vegetables, have kept pressure high.
“The figures are higher than expected, whether on a monthly or yearly basis,” Radwa El-Swaify, head of research at Pharos Securities Brokerage. “Food and drinks are the main reason for the increase.”
Naeem Brokerage said in a research note that increase mostly reflected rising demand including higher consumption of food products ahead of the Eid holiday at the start of June.
High inflation has placed Egyptians, millions of whom live below the poverty line, under increasing economic strain. The government and the military have occasionally intervened by providing food products below market prices.
As part of the IMF deal, Egypt is due to phase out remaining subsidies on most fuel products this month, which could add to inflationary pressures.